"Every startup lives with the same tension: a large incumbent can copy or crush it at any time. For Harvey, an artificial intelligence startup that builds tools for law firms and enterprises, the model-maker that powers its tech also has the power to destroy it. From Harvey's Manhattan office on Friday afternoon, cofounders Winston Weinberg and Gabe Pereyra put it bluntly. Harvey's toughest competitor isn't another niche startup; it's OpenAI."
""Our largest competitor is by far, indirectly, OpenAI," Weinberg said. "I mean that in the sense of just - you need to make sure that your product gives so much more value than whatever the general products they're releasing are." Harvey's biggest rival is also a backer. The OpenAI Startup Fund wrote one of the first checks into Harvey and has continued to increase its stake with additional funding. To date, Harvey has raised over $800 million."
Harvey develops AI tools tailored for law firms and enterprises while relying on foundational models supplied and funded by OpenAI. The dual role of OpenAI as partner, investor, and potential competitor creates strategic vulnerability for Harvey. Law firms will compare Harvey's domain-specific capabilities against general-purpose AI tools even if those tools are not marketed specifically to legal users. Surveys indicate lawyers already use general AI for memos, research, and outcome predictions with uneven accuracy, and courts have noted fabricated citations. The market-wide concern is that foundation model makers could release specialized offerings that diminish niche providers' advantages.
Read at Business Insider
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